About Home Foreclosure
While foreclosures may have a negative connotation to the general public, they’re not necessarily a bad thing to people who live and breathe real estate. The truth is, real estate investors eagerly seek out foreclosures in hopes of making some money.
Foreclosures are properties that have been taken away from owners because they missed a few mortgage payments. Missing mortgage payments can be due to serious illness, loss of a job, divorce, or bankruptcy.
When a homeowner misses a mortgage payment, the property is not foreclosed immediately. The lender will initiate a pre-foreclosure process by advising the property owner that if he does not meet the required payments, his house will be foreclosed. If the owner is still unable to make the payments after receiving the pre-foreclosure notice, the lender then proceeds to the foreclosure process – also known as public auction of properties.
When properties go into the public auction process, investors will look into foreclosure listings to see what kind of properties are available. Given that foreclosures are fairly common these days because mortgage interest rates have gone up and people can no longer keep up with payments, foreclosure listings have become longer and more varied.
How does one obtain a foreclosures listing? Numerous web sites specialize in US foreclosures; investors are not limited to their own geographical area. They can look at foreclosure listings in the east or west of the United States.
To view a typical foreclosure listing, you need to key in some criteria to narrow your search: city, state, price range (provide minimum and maximum ranges), property type (single detached home, condo, townhouse, etc), and the brokerage or agent name. The web site will then yield the results that correspond to your criteria.
Types of Foreclosure
The individual/s that hold the mortgage have the right to start foreclosure proceedings anytime following a default in mortgage.
There are several types of foreclosures.
Judicial Foreclosure This method is widely used across many states. The sale of the property
is initiated within the guidelines of a court. Once the property is
sold the proceeds will go the pay off the mortgage, if any funds are
left over they may be used to pay off other debt.
Foreclosure by Power of sale This method is a much quicker
process and is done without the courts involvement. Similar to Judicial
foreclosure all proceeds will be used to pay off the mortgage fist,
other debts are secondary.
Strict Foreclosure A rare method only practiced in a few
places. Under this type of foreclosure the lien holder will take
immediate ownership of the property after a certain allocated time by
the courts without any obligation to sell the property. Currently only
available in Vermont and New Hampshire.
